Degree Name

MS (Master of Science)

Program

Mathematical Sciences

Date of Award

5-2017

Committee Chair or Co-Chairs

Jeff Knisley

Committee Members

Baptiste Lebreton, Michele Joyner, Robert Price

Abstract

Existing multi-echelon inventory optimization models and formulas were studied to get an understanding of how safety stock levels are determined. Because of the restrictive distribution assumptions of the existing safety stock formula, which are not necessarily realistic in practice, a method to analyze the performance of this formula in a more realistic setting was desired. A SimPy simulation model was designed and implemented for a simple two-stage supply chain as a way to test the performance of the safety stock formula. This implementation produced results which led to the conclusion that the safety stock formula tends to underestimate the level of safety stock needed to provide a certain service level when predicted standard deviation of demand is underestimated and the assumptions of normally distributed demand and normally distributed lead times are not fulfilled.

Document Type

Thesis - Open Access

Copyright

Copyright by the authors.

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